SavATree is a portfolio company of CI Capital Partners. As a leading professional tree, shrub, and lawn care provider, the company focuses on providing arboricultural services to clients nationwide. Harris Williams recently advised SavATree on its sale to Apax Funds.
Here, members of our Consumer and Business Services Groups discuss why residential services companies are a compelling investment and what made SavATree particularly attractive. They also explore what other buyers should know about this space.
What is appealing to buyers about the residential services industry, especially arboricultural services?
Spiller: Buyers are drawn to residential services because they are generally recurring and non-discretionary. For something like plumbing, demand will be more on the non-discretionary side—consumers have to get leaking pipes fixed immediately. Arboricultural services, while also non-discretionary, are more on the recurring side—customers sign up for annual or seasonal programs to keep their landscapes healthy and attractive. Other residential services will likewise have a different balance between these kinds of demand.
Ledwith: More recently, strong consumer focus on improving indoor and outdoor living spaces has boosted this appeal. And while some residential services can be completed on a DIY basis, arboricultural services typically require professional expertise and equipment.
Lucas: Another attractive feature of residential services is consolidation potential. It’s a generally fragmented part of the economy that will support the development of scaled platforms. These tend to win share by providing a more modern customer experience while enjoying the benefits of professionalization and size.
For arboricultural services—which go beyond just tree care to help all outdoor plants thrive—most companies are small and have a regional reach, at best. As a result, the opportunity exists for a national brand to continue consolidating the market and building a leading brand.
What makes SavATree a particularly attractive asset?
Spiller: SavATree is one of the few arboricultural platforms with scale and is among the top companies in its sector. It has over 100,000 clients and locations in 23 states, with an attractive mix of residential and commercial work, and no customer concentration.
SavATree has consistently grown at a fast pace and is on track to continue growing for years to come. Part of this growth comes from its M&A engine that keeps getting stronger. SavATree has focused on acquisitions from the get-go, enabling it to consolidate this large, fragmented market and roll out a consistent brand across the country.
Walker: Along with bottom-line successes, SavATree has established a thought leadership position and is the go-to company for advice, whether you’re a municipality or a homeowner. In many ways, this company invented the arboricultural sector. SavATree focuses on science-based tree care and preservation, and it delivers a consultative service level far beyond what a typical arborist company provides. From treating lawns to being a steward for historic trees, its services address the sophisticated needs of affluent homeowners, as well as localities and commercial clients.
SavATree’s goal is to elevate customers’ expectations by providing a frictionless experience and managing all aspects of their lawn and tree care. This high-end support also builds deeper customer relationships, which has allowed SavATree to effectively cross-sell services and build recurring revenue.
What should other prospective buyers know about this sector?
Spiller: Residential services is a broad, diverse sector. Yet many of its categories share similarities: fragmented markets, few national or regional players, opportunities to apply new technology, and strong demand as people spend more on their homes. SavATree is a great example of a leading brand in a large subsector, and it has become the consolidator of choice. That’s a recipe for success.
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The Harris Williams Consumer Group consists of four major verticals – Food, Beverage & Agribusiness; Restaurants & Retail; Branded & Private Label Consumer Products; and Consumer Services – and has extensive experience in a host of subverticals.
The Harris Williams Business Services Group has completed business services transactions across all areas of the economy and is actively working with companies in a wide variety of sectors.